Inside Health

Court Denies Class Status For Plaintiffs Against Merck

By THE ASSOCIATED PRESS

Published: September 7, 2007

New Jersey's Supreme Court rejected on Thursday a class-action lawsuit against Merck & Company over the drug maker's withdrawn painkiller Vioxx.

The ruling is a huge legal victory for the company, which faces nearly 27,000 individual lawsuits from people claiming that Vioxx, once a widely used arthritis treatment, caused heart attacks and strokes.

The state's highest court, reversing two lower court decisions, ruled that a nationwide class was not appropriate for the lawsuit. The suit had been brought by a union health plan on behalf of all insurance plans that paid for Vioxx prescriptions, or about 80 percent of all Vioxx sold.

A lawyer for the New Jersey union said that because the state's consumer fraud law allows for triple damages, the case could have cost Merck $15 billion to $18 billion. The company's annual revenue last year was $22.6 billion.

Had the class action been allowed to proceed, it also would have been a major setback to the company's strategy of fighting the Vioxx lawsuits individually. Of the cases that have reached verdicts, Merck has won nine and lost five. A new trial was ordered in one case, and two others ended in mistrials this year.

Shares of Merck, which is based in Whitehouse Station, N.J., rose more than 2 percent, to $50.47, Thursday.

''We were thrilled with the decision,'' said John Beisner, who argued the case for Merck.

Christopher A. Seeger, lead lawyer for the plaintiff, the International Union of Operating Engineers Local 68 in West Caldwell, N.J., said he would pursue separate claims on behalf of individual health plans. He said that the high court did not rule that the state's consumer fraud law could not be applied to health plans from other states, so those claims could still be pursued in New Jersey, with the possibility of triple damages.